Loading...
HomeMy WebLinkAbout02/27/2012 Staff: Committee members: Steven Teglia, Assistant to the City Manager Russell Johnson, Chair Sue Benham Ken Weir REGULAR MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Monday, February 27, 2012 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA 93301 First Floor, Conference Room A A G E N D A 1. ROLL CALL 2. ADOPT JANUARY 30, 2012 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion and Committee Recommendation Regarding Local Vendor Preference Policy – Smith / Gennaro 5. COMMITTEE COMMENTS 6. ADJOURNMENT Committee Members: Staff: Steven Teglia Russell Johnson, Chair Assistant to the City Manager Sue Benham Ken Weir AGENDA SUMMARY REPORT REGULAR MEETING OF THE BUDGET AND FINANCE COMMITTEE Monday, January 30, 2012 12:00 p.m. City Hall North – Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 The meeting was called to order at 12:00 PM 1. ROLL CALL Committee members present: Councilmember Russell Johnson, Chair Councilmember Sue Benham Councilmember Ken Weir Staff present: Alan Tandy, City Manager Ginny Gennaro, City Attorney Rhonda Smiley, Asst. to the City Manager Josh Rudnick, Deputy City Attorney Steven Teglia, Asst. to the City Manager Andrew Heglund, Associate Attorney Chris Huot, Administrative Analyst Richard Iger, Associate Attorney Nelson Smith, Finance Director Raul Rojas, Public Works Director Sandra Jimenez, Asst. Finance Director Brad Underwood, Asst. Public Works Director Randy McKeegan, Accounting Supervisor Georgina Lorenzi, Asst. to the Public Works Director Kim Berrigan, Purchasing Officer Kevin Barnes, Solid Waste Superintendent Donna Kunz, EDCD Director Luda Fishman, Business Manager Ryan Bland, Associate Planner AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 2 Others Present:  Chad Manning, Jim Burke Ford Debbie Moreno, Chambers of Commerce Greg Broida, Haddad Dodge – Ram Ron Kirby, Haddad Dodge - Ram Stephen Pelz, Housing Authority Eric Xin, Brown Artmstrong Greg Sanders, Urner Brothers Inc. Jacob Panero, Kern Refuse / MRC Roland Burkert, BARC John Price, Kern Refuse / MRC Jim Baldwin, BARC John Parie, New Car Dealer Association Antonie Boessenkool, Bakersfield Californian 2. ADOPT SEPTEMBER 26, 2011 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Discussion and Committee Recommendation Regarding Expansion of Blue Cart Recycling Program – Rojas Public Works Director Raul Rojas stated staff identified an opportunity for the City to add universal curbside recycling to the City’s basic refuse service without a fee increase to the public. Favorable financial conditions, including: $5.3 million for cart reserves, $900,000 in available Landfill Closure Reserve Funds, operational savings, and stronger markets for sales of recyclables, compost, and wood chips yielding higher revenues, have let to this opportunity. The start-up costs are estimated at $5 million for the purchasing of recycling trucks and blue carts. An annual operating cost of $2 million is estimated to be initially paid out of the fund balance which may avoid rate increases. Implementation of the program could commence July 1, 2012 and could be phased-in over a three year period. Collection days could be structured so that residents will not have three different collection days, blue carts would continue to be collected every other week, residents can opt out of a blue cart if they have inadequate storage or prefer no blue cart. If the Committee recommends approval, an amendment to the hauling and recycling contracts would be needed and would be present to the full Council. City Manager Alan Tandy thanked BARC and other local haulers for their cooperation and assistance in assisting the City include the blue cart recycling service in the basic service to all city residents. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 3 Committeemember Sue Benham thanked staff and everyone involved for their hard work in accomplishing this kind of service which has been a goal for several years. Committeemember Ken Weir also thanked everyone. Committeemember Weir asked if the program was successful and the carts were being filled faster could the service be changed to have the blue carts picked up weekly. Public Works Director Rojas stated it would be a good thing but may not occur for some time. Staff would need to speak with the local haulers to renegotiate at that time. Solid Waste Superintendent Kevin Barnes stated for current users who fill their blue carts rapidly, it is recommended that they acquire an additional cart, flatten boxes, etc. to allow more space in each cart. Committee Chair Russell Johnson stated this is a great example of stewardship and partnership and also thanked everyone involved. Committeemember Benham made a motion to have the proposal presented to the full Council. It was unanimously approved. B. Discussion and Committee Recommendation Regarding FY 2012-13 CDBG Action Plan –Kunz Economic and Community Development Director Donna Kunz summarized the Annual Entitlements received by the City through the U.S. Department of Housing and Urban Development (HUD). These entitlements help to improve the quality of life of low to moderate income neighborhoods, improve infrastructure to the neighborhoods, and promote job opportunities and job promotions for low income individuals. The HUD Community Development Block Grant Program (CDBG), HOME Investment Partnership (HOME) and Emergency Shelter Grant (ESG) entitlements for FY12-13 are $4,296,008. Staff is projecting $7,000 in program income for CDBG and $30,000 for HOME. The total proposed budget for CDBG, HOME and ESG for FY12-13 is $4,333,008. FY 2012-13 Proposed CDBG: The total resources available for FY 2012-13 are $3,014,770. This amount includes the CDBG entitlement of $3,007,770, and the project program income of $7,000. The total resources are allocated as follows:  Total Administration – 20% Cap: $602, 954  Long Term Obligations: $407,900  Public Services: $352,376. Services include Fair Housing, Mill Creek, Southeast, and Baker Street Police Patrol, and the Bakersfield Senior Center. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 4  Low-Mo Benefit: $513,960. Services include Home Access Grant Program, Baker Street Commercial Incentive Program, and BARC Equipment Purchase and Installation. FY 2012-13 Proposed Capital Improvement Projects: Net resources available for Capital Improvement Projects (CIP) are $1,137,580. Staff submitted the following consideration:  Alta Vista Area: curb, gutter, and sidewalk reconstruction;  East California Area: curb, gutter, and sidewalk reconstruction; and  Arts Alive District Streetscape Improvements. Director Kunz then presented the following prgrams that also would be included in the CDBG program: Home Investment Partnership (HOME): The total funding available for FY 2012-13 is $1,055,460, 10% of which was set aside for administrative costs. This amount includes the HOME Entitlement of $1,025,460 and $30,000 of projected program income. Proposed Housing Programs: Staff estimates that the total Program/Project Costs and Direct Delivery for FY 2012-13 is $874,914. This Program/Project cost includes $153,819 in HUD mandated Community House Development Organization (CHDO) sponsored projects, $721,095 for New Construction, and $75,000 in Direct Delivery, which HUD allows for operating costs. Emergency Solutions Grant (ESG): Staff proposes $262,778 in ESG to fund the Bakersfield Rescue Mission ($68,000), Bethany Homeless Shelter ($68,000), Alliance Again Family Violence ($21,667), and Homeless Prevention ($85,403). A provider is to be determined for the Homeless Prevention allocation. Committee Chair Russell Johnson asked if the Baker Street Commercial Incentive Program allocation would be spent on tenant improvements. Economic and Community Development Director Kunz stated it would be spent on tenant improvements and be directly associated with job creation. Committeemember Sue Benham made a motion to adopt the proposals. The motion was unanimously approved. Mr. Jim Baldwin representing BARC thanked staff for all the support and thanked everyone for all their work and dedication to the entire City. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 5 C. Discussion and Committee Recommendation Regarding Local Vendor Preference Policy – Smith/Gennaro Committee Chair Johnson stated he made this referral after an out of town vendor was awarded a contract for an auto sale. Committee Chair Johnson requested staff to investigate how Kern County provides a 5% preference for local bidders. City Attorney Ginny Gennaro stated that as a Charter City, the City of Bakersfield would not be able to implement an identical process like Kern County because of language in the City Charter pertinent to low bids and anti-collusion provisions (Sections 136 and 140 of the City Charter). Finance Director Nelson Smith stated that in response to Councilmember Hanson’s referral to prepare a comparison of the total number of dollars spent on purchases put out to bid for each year and what three and five percent would mean to the process, staff reviewed all non-construction bids processed for FY 2010-11 and determined the total dollars of bid awards during that period was $20,392,784 with 25% related to local purchase and 75% related to vendors outside the city limits. A three percent preference would cost $459,000 on an annual basis and a five percent preference would cost $765,000 on an annual basis. Finance Director Smith also summarized a survey conducted of comparable cities regarding local vendor preference policy. Two cities have a policy similar to Bakersfield allowing for one percent preference based on the local sales tax dollars that return to the city. Only one city had a policy similar to Kern County where the local vendor is allowed to match the low bid after the bid opening has taken place. The remaining cities had a variety of preference policies, including: local preference from 2.5% to 5.0%, dollar caps from no cap to $25,000, restrict the preference to the city and county limits, and some require the vendor have been in business for a period of time and/or have a number of employees, etc. Finance Director Smith also summarized the following options available for discussion purposes.  Option 1: Status quo – retain the current 1% vendor policy.  Option 2: 3% local preference with no dollar cap. This would expand the current policy beyond the sales tax nexus, but as a Charter City the Council could make a finding of general benefit to the community. It would also have a potential financial impact to the city of approximately $600,000 per year in additional costs.  Option 3: 5% local preference with a dollar cap of $15,000. This would also expand the current policy with a finding of general benefit to the community, but would place limits on the financial impacts to the annual budget. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 6 There are also a variety of scenarios which can be created with a mixture of the above. Committee Chair Johnson asked Finance Director Smith to describe in detail how Kern County does there policy. Finance Director Smith stated that after the County conducts their bid, they open the bids received. They would then go to the local bidder(s) and ask if they could match the outside vendor bid or lower. If the local bidder(s) is willing to do so, the County will allow them to change their bid and award the bid at that time to the lowest bidder. Debbie Moreno representing the Chamber of Commerce stated that over the years the Chamber has heard great discontent from local business because there is such a small local preference. Ms. Moreno also asked if it was necessary to have an anti-collision policy in the charter as a Charter City. City Attorney Gennaro stated any policy in the charter is changeable and can only be changed by the vote of the people. It would be very expensive. Greg Broida representing Haddad Dodge – Ram asked if any changes occur would it be generalized to construction and other acquisitions, not just automotive purchasing. Committee Chair Johnson stated it would not; it would apply to goods and services. Finance Director Smith stated that the one percent vendor preference applied to any bid which has a sales tax component excluding construction projects. Chad Manning representing Jim Burke Ford stated that his business has missed several opportunities to do business with the city. If the City had a policy like the County, where they would approach the vendor and ask to match the lowest bid, Ford would have been awarded a few more bids with the City. John Parie representing the New Car Dealers Association stated there are immeasurable economical components in allowing a large portion of all bids to go outside Kern County. The City should try to establish a policy similar to the County to allow local bidders an opportunity to match an outside vendor. He also stated that the City should set an example by buying local whenever possible. City Manager Alan Tandy stated that the local vendor preference is not causative of the 25% and 75% purchases. The City purchases a variety of specialty items, like special ordor control chemicals for the wastewater treatment plant. The justification for a 3% or 5% preference would be based on the payment of property tax and other things which local business brings to the economy of the city. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 7 City Attorney Gennaro stated if a policy similar to the County was used, vendor 1 could be contacted and told the bid amount for certain goods can you match the amount or go lower. Then vendor 2 can be contacted and told vendor 1 can provide the goods at this amount could they match the amount or go lower, and this could go on and on. This would cause conflicts with the collision policy. Committee Chair Johnson asked if the policy could be amended to state in a situation where a vendor is 2% or 3% higher; they could choose to match the bid and if they are a local vendor they could be awarded the bid. The options summarized by the Finance Director would be providing a credit to the vendors; Committee Chair Johnson stated he would like this to be avoided. Committeemember Benham stated that the Committee should rely on the City Attorney for legal advice. It would not be wise for Committeemembers or Council members to manipulate the report provided, against legal advice. Committee Chair Johnson asked if it was a violation to disclose at the beginning of the bidding process that if a local vendor is within a certain percentage, they would be given an opportunity to match the lowest bid and be awarded the bid if they choose to. City Attorney Gennaro stated it would be, because you are operating off of someone else’s bid. Committeemember Weir asked staff if they could quantify the benefits if Option 3 was selected as summarized by Finance Director Smith. Finance Director Smith stated the cities surveyed in the report where not asked how they quantified their 3% or 5% preference. Committeemember Weir asked staff to contact the surveyed cities again and prepare a report to be presented at the next meeting. Committeemember Weir left the meeting. D. Discussion and Committee Recommendation Regarding Annual Audit Reports FY Ending 2011 – Smith Finance Director Smith provided a review of six separate audit reports for the fiscal year ending 2011. 1. Comprehensive Annual Financial Statement This report represents the City’s financial statements as of June 30, 2011. The City complied, in all material respects, with accounting principals generally accepted in the United States. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 8 2. Agreed Upon Conditions Report This report is designed to increase efficiency, internal controls, and/or financial reporting. There was one reportable condition, which pertained to minor variance in the way the accounting software distributes costs of purchase order line items that have multiple funding sources being charged to multiple project numbers. The City’s software vendor has been made aware of the irregularity and is working on a program correction. Staff has implemented an additional procedure to manually review these special transactions. The report also addresses three conditions identified in the prior year report, which have all been resolved to the auditor’s satisfaction. Committee Chair Johnson asked how many purchase orders experienced the error and when was the manual review of these transactions implemented. Finance Director Smith stated there was only one purchase order with this kind of error and staff implemented the additional procedure immediately after the error was found. 3. Single Audit Report This report pertains to federal program monies expended by the City firing the specified fiscal year. The City complied, in all material respects, with federal program guidelines. 4. Independent Auditors Report There were no audit findings. 5. Appropriations Limit There were no audit findings. 6. Rabobank Arena, Theater, Convention Center, Bakersfield Ice Sports Center, and Brighthouse Networks Amphitheater The report presents the financial statements for the operational unit as of June 30, 2011. There were no significant issues with the audit. Committeemember Benham made a motion to have the reports presented to the full Council for approval. The motion was unanimously approved with Committeemember Weir absent. AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, January 30, 2012 Page 9 E. Discussion and Committee Recommendation Regarding the 2012 Committee Meeting Schedule – Teglia Committee Chair Johnson asked why the meeting in September was on a Tuesday instead of a Monday. Assistant to the City Manager Steven Teglia stated there was a conflict in schedules with the Legislative and Litigation Committee schedule. The scheduled was adopted as submitted. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting adjourned at 12:14 PM cc: Honorable Mayor and City Council DOCUMENTS HANDED OUT AT THE COMMITTEE MEETING Name SihNI4 kc f.,_,. AJJJ~J~ v~.:fl GRc-& J, Ll-1/1 Yh.! (I,J . ~y f!_A n ·s J/1.} fJw...~~bd. k' tl'AA fb eAN1 O!u - ~~~ H~Jr- l ~ k4::D M tk;1l IV ,,1/~ ~<A~'-t ~<-...._-__._ ~ -~' -I BUDGET AND FINANCE COMMITTEE Monday, FEBRUARY 27,2012 ATTENDANCE LIST Organization cMD ~,../, ~..,.,~- l.tJ ~~~~ /I/!/() .... , ('/>(0 ...... ~ ~ VVvvcl.ACii t ~ I ·M~~r)v·-JuA' ~ I\ I :ft 1M &,JILl/ ;t:;-7iJi:D ~ I v Contact: Phone/ E-mail X. 7:1 7'-il; ~~~\{ 1t-372( Media Notification for Budget and Finance Committee Meeting Monday, February 27, 2012 jJ :···~.···::.riii9;;;r~;·[s4~;:EI'srliio~,1c:;~· '.:.::l All ~--'--'--''--'---":-'~;-';-;;-v--'~~~.;,..;;;....;;~~"""----'-',~------"-'=--_....., _J fdain ·0 Trash > '